Recently an AAR was being circulated of Authority for Advance Ruling, Goa in case of Springfields (India) Distilleries, Raia Salcete wherein the applicant contended that hand sanitizer should be taxed at 12% under the heading:
30049087 – Antihypertensive drugs: Antibacterial formulations not elsewhere specified or included HS code and Indian Harmonized System code. Rate of GST 12%.
However the authority for advance ruling was of the opinion that such hand sanitizers would be covered under 3808 HSN and accordingly charged to GST at 18% since it is classified as such by Ministry of consumer affairs, food and public distribution, this authority is of the view that exempted goods are covered by notification no. 2/2017/- Central Tax (Rate) dated 28.06.2017. Merely classifying any goods as essential commodity won’t exempt it from GST.
Now, CBIC has issued clarification on same vide a press release wherein it has been stated that:
Sanitizers are disinfectants like soap, anti-bacterial liquids etc. which will attract GST at 18%.
Further the input used for sanitizers i.e. chemicals, packing material, input services also attract GST rate of 18%. Reducing GST rate on hand sanitizers would lead to an inverted duty structure and put domestic manufacturer at disadvantage.
Lower GST rates help imports by making them cheaper. This is against the nations’s policy on Atmanirbhar Bharat.
CBIC clarification on Hand sanitizer
To read Press Release CLICK HERE.
To download Goa AAR CLICK HERE.
Similarly GST rate on cotton face mask is 5%, other than cotton face mask 12%, gloves 18%.
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